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Does it cover the whole scope of the purchases, provide how offerings should be made?
Mr. Tulloss. I think the Comptroller General has held that it is amendatory to section 3709, and is not a complete code within itself. In other words, that it does not coverRepresentative JENKINS. Are you sure of that? Mr. Tulloss. I would not like to be sure of it. Representative JENKINS. Will you find out and let us know?
Mr. Tulloss. Mr. Biddle has apparently looked into that question and found that to be the case.
Representative JENKINS. Then you hold that it is amendatory and certain provisions of the old section 3709 still might apply for the T. V. A.?
Mr. TULLOSS. Yes.
Representative JENKINS. But the dispute that you have now has been with reference to the purchase of-I presume with reference to the discretion of the Board in awarding bids as to whether or not the character of the individual is sufficient, or the quality of the goods is sufficient, or various other exceptions in that amendment?
Mr. Tulloss. And whether or not it is just amendatory or whether it is a substitution.
AUTHORITY'S POSITION RE SECTION 3709 REVISED STATUTES Representative JENKINS. What does the T. V. A. hold? That it is & substitution? Mr. Tulloss. I think possibly. I wouldn't be sure; that the T. V. A. takes the position that this is a complete code within itself, and that 3709 is not for application.
Representative WOLVERTON. May I just supplement that a little further, so that we can get the situation before us?
Notwithstanding your statement that you have just made, that you think that the T. V. A. takes the view that you have just expressed, they have never abandoned the basic viewpoint that they are not a Government department and therefore they don't have to observe it if they do not wish to?
Mr. Tulloss. I think that that is correct, so far as comparing them with a Government department, although I think that they claim that they are a part of the United States Government.
Representative WOLVERTON. I hope that they never get to the point where they think that they are not; but as I have read the correspondence, not only with respect to this matter, but the other matters that the committee has already had, and which has been the basis of considerable discussion, it seems to me that the T. V. A. takes the position that in the final analysis, they can or cannot observe those provisions, as they see fit. In other words, that they are not a department in the sense that, we will say, the Navy Department or the Department of War are, but that they are an outside agency and therefore do not come within the purview of the statutes that relate to departments of the Government. Mr. Tulloss. Yes, sir.
Representative JENKINS. They like to be outside of the Government except that they don't want to be outside of the Treasury; they want to be close to the Treasury.
Mr. BIDDLE. Their claim being, I understand, also, that you must look to the T. V. A. Act and the T. V. A. amendment in order to determine what the powers of the T. V. A. are.
Mr. Tulloss. And there alone.
Representative WOLVERTON. Now, some reference has been made to the necessity of a referee. It has been suggested that there should be someone in the Government service who could perform the functions of that position. I gathered from what you said that under a statute, the opinion of the Attorney General would prevail.
Mr. Tulloss. No, sir; I didn't mean to convey that idea. The opinion of the Attorney General would be advisory, and would be considered, in any matter of that kind, but if the matter was for action of the Comptroller General, he would not defer entirely to the opinion of another. In other words, he would take that as his responsibility and must exercise his own judgment.
Representative WOLVERTON. Is that the same viewpoint that is taken by other departments of the Government, with respect to the effect of the Attorney General's opinion?
Mr. Tulloss. No, sir; we have had numerous occasions where the departments have insisted upon following the opinions of the Attorney General, notwithstanding the action of the Comptroller General to the contrary.
Representative THOMASON. In your department, the opinion of the Attorney General is not controlling?
Mr. TULLOSS. No, sir. Senator SCHWARTZ. It is merely conciliatory. Mr. Tulloss. The law provides that he may render opinions on administrative matters, and his is on administrative as distinguished from the Comptroller General upon the financial transactions of the Government.
Representative WOLVERTON. There seems to be some merit in the suggestion made a minute ago, that in the final analysis Congress itself must be the referee by fixing the law in the way that they wish to.
Mr. Tulloss. The Comptroller General frequently suggests that the remedy is with the Congress, and rests at that point, where there is disagreement.
Representative WOLVERTON. Then, as I understand your viewpoint with respect to this all-important question of selling to the lowest reasonable bidder, your office takes the position that section 3709 is still in effect except so far as the provisions of the amendment may have changed it?
Mr. TULLOSS. Yes, sir.
Representative WOLVERTON. I think that that is usually the principle of interpretation, that is implied, and I would gather as I think it was suggested by my colleague from North Carolina, that the purpose of the amendment was to broaden the scope of section 3709 insofar as it is set forth in that amendment.
Senator SCHWARTZ. And it is your further opinion, isn't it, that the Congress didn't do a very good job by the amendment, because you are still now in controversy as to what the amendment meant?
Mr. Tulloss. We are not with ourselves.
Representative BARDEN. Congress writes the law, but we have to get at what interpretations are going to be put on it by the Comptroller, and he has—and the one that has the authority to interpret the law is the one that really gives it its effectiveness.
Representative WOLVERTON. That is what has resulted from the T. V. A. taking that position.
Representative THOMASON. Does your office hold that the lowest bid is always the best bid?
Mr. TULLOSS. No, sir.
Senator SCHWARTZ. Mr. Wolverton used the words "the lowest responsible bidder" and that is what is generally meant by the low bidder, isn't it?
Mr. Tulloss. Yes, sir.
Mr. BIDDLE. Just let me ask one in relation to this, and that is this: Several exceptions have been filed since the amendment was passed, and I think you said that the amendment doesn't completely settle the matter. Now, is it true that those exceptions, where they deal with bids taken which were not the lowest responsible bid, under the exceptions granted in the amendment, were based on the fact in a large majority of cases, or a great many cases, that the T. V. A. hadn't rendered you sufficient information to show whether or not an emergency required immediate delivery, or whether or not the exceptions in the 1935 amendment were applicable, and as that information is from time to time furnished the exception is withdrawn?
Mr. Tulloss. I think that that is correct; yes, sir.
CRITICISMS OF SPECIFIC AUTHORITY PURCHASES
Representative WOLVERTON. In order that we might have the situation very plainly before the committee in sort of a concrete way, I have before me the exception that you took to the awarding of a contract to the Bucyrus Erie Co. in the amount of $39,950.50, and you state that the low bidder was the Link Belt Co., and there is certainly no question about the responsibility of the Link Belt Co., is there?
Representative THOMASON. Are they from New Jersey?
Representative WOLVERTON. No; if they had been the question wouldn't even be raised.
Mr. Tulloss. We had no knowledge-let me put this differently: By reason of that item being in the report, I would say that we had no knowledge that the Link Belt Co. was not a qualified bidder, and therefore the exception was taken because there was a lower bidder.
Representative WOLVERTON. Take the next item, the Marion Steam Shovel Co., $8,000. To make a long comment short, you state:
: It appears that the Thew Shovel Co. submitted a bid at $6,000 and $7,000, the machines being rebuilt, which apparently met the advertised specifications.
I assume that you took the exception there because you were not satisfied that the steam-shovel company was not responsible?
Mr. Tulloss. Yes, sir; that is right.
Representative WOLVERTON. I find the Marion Steam Shovel Co. got another award at $9,000.
Representative BARDEN. May I ask if that was any different, that $6,000 and $7,000 and $8,000 item? Is that the difference between a new machine and a second-hand machine, being rebuilt?
Mr. Tulloss. I think that they—that the bids were on rebuilt machines.
Representative BARDEN. Wouldn't the advisability of accepting either one or the other of those machines determine to a large degree upon the inspection of a mechanic or a man who was familiar with the machinery of those two jobs?
Mr. Tulloss. I believe that that would be a good point here.
Representative BARDEN. If they had done that, and found that the one second-hand machine was not in as good shape as the other second-hand machine, would it have been wise to have taken the less valuable machine?
Mr. Tulloss. The information-this exception here is largely for that information; that information was not made available, and now had they shown, and probably they have shown somewhere, just what caused them to take the higher bid.
Mr. BIDDLE. Would you look at the page where that is shown, so that in answering the particular item you may have the T. V. A.'s reply handy as well?
Mr. Tulloss. I will try to do that but I am unable to match these.
Representative WOLVERTON. Let me insert this fact: That according to your statement, in this report, you have said:
Shovel to carry factory guarantee same as new shovel.
which apparently met advertised specifications. So that it was a reconditioned shovel with a guaranty of a new shovel on the bid.
Representative BARDEN. Then you get to the question of what guaranty does a new shovel carry. Maybe it doesn't carry any.
Representative Thomason. If you ever used a used automobile, you would understand what Mr. Barden is driving at.
Mr. Tulloss. The exception is intended to convey the idea that the bids were equal in every respect, except amount, and that the higher amount, or the higher bid, was accepted.
In other words, the specifications, and the conditions, and warranties, and what-not, were identical, or at least so nearly comparable that we were unable to discern any basis for accepting the higher bid.
Representative BARDEN. You don't know whether the Government got the best end of the trade or the worst end of the trade?
Mr. BIDDLE. Look at the answer to that item.
Representative BARDEN. Let us see what the answer to that item says:
Mr. Tulloss. The statement says:
See Mr. C. H. Garrity's letter to F. J. Carr, Comptroller, dated May 15, 1933, as follows:
"This office requested bids to be opened October 10, 1933, for a new shovel, gasoline driven.”
Senator ScHWARTZ. What kind of shovel? Mr. Tulloss. New shovel, gasoline driven. These bids were rejected because prices were too high, and the delivery period was too long to suit our needs.
We were then requested to pick up quickly a second-hand shovel as described in our letter requesting quotations. The two Lorraine 75 shovels offered by the Thew Shovel Co., even though they apparently met advertised specifications, were 5 years old, and out-of-date models, whereas the Marion Steam Shovel Co. offered equipment that was only 2 years old, and embodied the latest engineering development of that company.
The difference involved in purchasing the Marion shovel was $1,000, and we have saved many times this amount in repair parts since our engineers felt that the old-type Lorraine equipment not having the latest developments, would have been expensive at any price. The Thew Shovel Co. would admit that they offered us obsolete machines.
On this basis, we felt that their bid was high, when considering that it was for obsolete equipment and was taken into consideration in making the award.
See also letter from Mr. Ross White dated October 1937, explaining desirability of purchasing Marion type shovel.
Representative BARDEN. I thought that you said that they hadn't given you any explanation?
Mr. Tulloss. I beg your pardon. I am speaking from our audit report, made in April of 1935.
Representative BARDEN. Now, right in line with what Senator Mead said this morning, don't you think in fairness to all, and in order for us to get any kind of an idea about the correctness of this situation, that when you read a charge like that from your record, if you know that you have an explanation of it, why doesn't fairness demand that you read the explanation of it, without somebody having to ask for it?
Mr. Tulloss. I beg your pardon, sir, I didn't read the item from our report. I was asked to explain the reason for the exception, and when I was asked to read the reply, I have read the reply.
Representative BARDEN. Well, you gave the exception and were passing right on without giving the reply to the situation. Now, I will ask you if that reply is acceptable to you?
Mr. TULLOSS. I do not know. This information was made available to us after the report. I don't know that that reply is satisfactory.
Representative BARDEN. Did you have the file, did you have access to the files that carried the report of that transaction, when you made your report?
Mr. Tulloss. Yes, sir; but it was not there, I am told. Representative BARDEN. Well, now, who told you, Mr. Tulloss? Mr. Tulloss. My associate.
Representative BARDEN. Let's get down and find out who it is that is telling you fairy tales.
Mr. Tulloss. Let me make this clear, if you please, I am not testifying here of my personal knowledge of these matters. I explained in the beginning that I had general supervision of this auditing force.
Practically all of the information that I have given has come from the written record made by others generally, and from advice of auditors who were on the job.
Representative BARDEN. And when you express an opinion about matters you are expressing that opinion, when you say "It is my